Precious Metal ETFs Have Opportunity to Shine

Investors seeking ways to diversify their portfolios may look to alternative assets like precious metals ETFs as volatility spikes and demand continue.

In a year of marked by stubbornly low interest rates, a weak U.S. dollar, depressed inflation and sudden bouts of uncertainty, the current macroeconomic environment has been favorable for gold and silver.

“This environment, while likely to remain supportive for gold, has been met with the catalyst of event risk driven demand,” Maxwell Gold, ETF Securities Director of Investment Strategy, said in a research note. “This August was full of events traditionally benefiting metals including geopolitical tensions with North Korea, political uncertainty in Washington, and static monetary policy as evidenced by the dovish commentary from both Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi at the Jackson Hole Economic Policy Symposium.”

As we prep for the rest of the year, investors should consider the various risks that could crop up and look for ways to hedge against the unknown, especially with U.S. equities looking pricey in an extended bull market.

“These event risks may continue to be the key driver for gold and silver in the short term as investors attempt to navigate risk-off headlines and heightened volatility,” Gold added.